Celebrating International Credit Union Day
The 20th of October 2022 is International Credit Union Day, which is a great time to reach out to more people to explain how credit unions work and the benefits that they can provide to both families and individuals. The theme of this year’s International Credit Union Day is ‘Empower Your Financial Future with a Credit Union’, emphasising that people can use the financial services and support near to their home, while benefitting from the worldwide collectiveness.
Credit unions were created by a movement in Germany to establish a rural cooperative lending institution. The first credit union society was set up in 1859 and the movement quickly grew around the world. However, it was not until 1979 that the UK developed a legal structure for credit unions. Now there are around 1.92 million credit union members in the UK, with credit unions of all sizes. Credit unions are established for a specific community, which could be employees of a company or people living, working, or worshipping in a particular geographical area.
Credit unions vary in terms of the types of products and services that they offer but generally, they provide loans and savings accounts to provide an alternative option to banks.
How a credit union differs from a bank
There are a number of key differences between a credit union and a bank:
- Credit Unions usually provide better interest rates compared to high interest credit cards and loans that banks provide.
- Credit unions are created for members, not profits.
- Based in the local community, there is usually a local office you can visit, rather than queuing to speak to an advisor as you do with many banks.
- Credit Unions offer impartial financial advice, where the adviser will explain suitable products and work in your best interests, rather than trying to sell you a product that might not be the best option.
- In some cases, you can still apply with poor credit, if it is deemed loan repayments can be repaid. However, be aware that credit unions will not lend to people who cannot afford to pay back a loan.
You can find out more about the differences and benefits in our blog 5 Reasons to Choose a Credit Union.
Top benefits of using a credit union
A credit union will usually be a better option than using a bank to avoid high interest charges. Pay day loans and high interest credit cards can take decades to pay off, while credit union loans are structured to be paid off within a short-term period.
There are flexible ways to pay off a credit union loan, including payroll deduction if your employee is enrolled for it. This type of payment makes paying the loan off easier, as the money is taken out before pay goes into your account, so you are budgeting to the remaining amount.
Times like Christmas can be very expensive, especially for families with children, and credit union Christmas loans or savings accounts can help to make these times more affordable by spreading the cost. Unexpected costs such as a car repair or boiler replacement can also cause financial stress, which a credit union loan or savings could relieve.
Find out more about the Central Liverpool Credit Union services on our website.